Rebound in Consumer Complaints – Rise in Online Purchases & Vaccinations Related Complaints Advocacy for Mandatory Cooling-off Period Building a Friendly Consumption Environment for the Elderly

31 January 2019
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Rebound in Consumer Complaints –  Rise in Online Purchases & Vaccinations Related Complaints Advocacy for Mandatory Cooling-off Period  Building a Friendly Consumption Environment for the Elderly

Consumer complaints received by the Consumer Council rose by 5% last year, from 24,881 cases in 2017 to 26,165 cases in 2018, of which complaints against the service sectors climbed 11% to 15,453 cases, representing 59% of the total complaints, whilst complaints against goods dropped 3% to 10,712 cases, accounting for 41% of the overall complaints.

This was the first rebound in the number of complaints since 2014 triggered largely by a 3.5 times increase in vaccinations related complaints. Equally worrisome was the 5% rise in complaints about sales malpractices to 3,718 cases, which was the highest in recent years.  The rapid growth of online shopping gave rise to transaction disputes, including inaccurate descriptions of goods, late deliveries, and cash-on-delivery issues with 4,982 cases recorded, representing an increase of over 1,000 cases. The increase showed that the problems arose at every stage during the online sales transaction and the situation had been deteriorating, requiring immediate attention.  Besides, ever since the Council named and reprimanded 7 drugstores in 2015, coupled with the Customs and Excise Department strengthened its enforcement actions, the malpractices in the trade were generally contained. However, complaints leveled by tourists against retailers of ginseng, dried seafood delicacies and Chinese herbal medicines rose a significant 45% year on year, showing a sign of relapse of the problem.

The Council published a report last year advocating the introduction of a mandatory cooling-off period for 3 industries, namely the beauty, fitness and time share services with prepaid contracts, as well as unsolicited contracts and distance contracts so as to enhance consumer protection and reduce financial loss to consumers stemming from unscrupulous trade practices.   Earlier this month, the Government published a public consultation paper on the cooling-off period. The Council is studying the proposals and will submit its views to the Government for its consideration.  The Council calls on consumers and the various trade sectors to actively take part in the consultation and put forward their views in that regard.

5 Top Complaint Categories

Telecommunication services remained the trade sector attracting most  complaints, with 2,796 cases recorded in 2018 but still it showed a decrease of 13% when compared with that of last year.  There were fewer complaints in most areas but complaints about long-distance calls still showed an increase.  The Council believes that the enhanced understanding of consumers about telecommunication services, coupled with the measures taken by the telecommunication companies to mitigate disputes arising from shocking bills should have helped reduce complaints on price dispute by 14% year on year.

Complaints against vaccination services surged rapidly last year that rendered medical services to become the second-highest complaint category.  Complaints involving vaccines accounted for nearly 90% of this complaint category.  The Council once again appeals to medical organisations providing vaccination services to ensure adequate supply of the vaccines before collecting payments from consumers.  The Council will continue to closely monitor the situation.

Travel related complaints were the third-highest category with 2,347 complaints recorded, representing a decrease of 6% year on year. The decrease was mainly attributed to the reduction in complaints relating to air tickets and airline services.  Nonetheless, there was an increase of 65% in complaints against hotels.   The closure of a travel agency during the year also gave rise to dozens of complaints.

Complaints about electrical appliances ranked fourth with 1,832 cases recorded, showing an increase of 12% when compared with that of last year.  Complaints increased in nearly all types of appliances, involving mainly product quality, sales practices and late delivery.  Also on the rise were complaints involving some small domestic appliances, such as heaters, air purifiers and electrical sockets.  Though they made up only a small fraction of the overall complaints of this category, these complaints mainly involved issues of product safety and quality which consumers must not overlook.

In the fifth place was food and entertainment services related complaints that rose by 25% to 1,464 complaints.  The increase was mainly due to complaints relating to the sales of admission tickets and souvenir items of public performances that rose by 3.5 times in last year.

Tourist Complaints

The upsurge in tourist complaints was due to inadequate supply of HVP vaccines to meet the demand.  As the vaccines require 3 inoculations to become most effective, some service providers were unable to complete the whole course of inoculation, despite their customers had already paid the full amount for the services.  As a result, the Council received over 2,000 complaints which were almost 4 times more than the previous year and accounted for almost all the increase for this complaint category.

It was noteworthy that over 90% of these vaccination related complaints were lodged by Mainland visitors that contributed mainly to the 93% rise in the overall complaints lodged by Mainland visitors.  However, there were still other reasons causing such upsurge.  Complaints about the purchase of ginseng and dried seafood delicacies, and Chinese herbal medicines had gone up 52% and 18% respectively, reflecting the malpractices from drugstores targeting at visitors showed an obvious sign of relapse.

The Council had named 7 drugstores/medicines shops for unscrupulous trade practices several years ago. Some of these shops subsequently closed down but other notorious traders continued to employed unscrupulous sales tactics detrimental to the interests of both visitors and local consumers.  The Council has been keeping a close eye on the situation since the recent opening of the Hong Kong–Zhuhai–Macao Bridge and the High Speed Rail, as well as the consequential rise in Mainland visitors to see if visitors related complaints will continue to surge.  The Council stresses that tourism is an important economy pillar of Hong Kong, so if complaints from visitors continue to rise unabated, it will not only adversely affect the local retail industry but will also tarnish the reputation of Hong Kong as a “shopping paradise”.

Online Shopping

Online shopping has been a way of life for consumers as reflected from the complaints made with the Council.  In the past year, complaints relating to online shopping increased significantly by more than 25% to 4,982 cases.  As in the previous year, travel matters were the most common type of online shopping complaints, accounting for 1,349 cases or nearly 30% of the overall online shopping complaints with booking of air tickets and hotels being the most common ones.  Following closely were complaints relating to food and entertainment services, which increased near a double to 404 cases of which most were mainly related to ticket sales for public performances.

Regarding the nature of the complaints, late delivery (27%) and sales practices (13%) recorded increases of over 30% and 50% respectively.  Of particular concern was the continuing rise in complaints concerning cash-on-delivery payments, which rose by 115% year on year to 189 cases.  Many complainants found the goods delivered were not the same brand or design as they had ordered, and there were also many complaints about discrepancies in quality and quantity.  Given that customers receiving the goods had to sign before opening the package, even if they found the goods different from what they had ordered, pursuing the matter with the courier invariably proved futile.  Furthermore, as the traders involved in these sorts of complaints usually promote their products on social media without providing any address or telephone number, consumers generally found it extremely hard to seek redress. 

Travel Matters

Hong Kong people love to travel so travel related complaints were on the rise in recent years.  However, in last year a drop of 6% to 2,347 cases were recorded. In the year before, the upsurge in complaints was triggered by the sudden cancellation by an airline of many flights on the eve of the Mid-Autumn Festival and the National Day holidays.  As there were no such incidents happened last year, complaints about air tickets and airline services dropped.

Conversely, there was an increase 166 complaints about hotel bookings of which most involved consumers arriving at their destinations to find that their booking could not be honoured due to discrepancies in the information they had provided during the booking.  Consumers are reminded that in recent years there has been a proliferation of websites operating in the name of sharing economy to provide short-term lease of residential units to travelers. In some places, this kind of leasing may be illegal and in the absence of any protection for consumers, it is difficult to seek redress should any dispute arise.

Looking Back and Forward

In last April, the Council published “A Report to Advocate Mandatory Cooling-Off Period”, to which the Government has responded positively.  In mid-January 2019, the Government launched a 3-month public consultation on statutory cooling-off period for beauty and fitness services consumer contracts, and is targeted to submit a Bill to the Legislative Council in 2019/20 for deliberation.  The Council looks forward to the active participation of all sectors in the consultation, leading eventually to a cooling-off regime suitable to  Hong Kong. 

During the year under review, the Council named the beauty centre “Pretty Beauty” for a number of undesirable sales practices, including inducements to entice prospective customers to sign a contract, high-pressure sales tactics for costly treatments, misleading contract terms and charges, and even refusal to provide redress to consumers with mental incapacitation.  The Council hopes that the naming sanction will effectively stop the company from engaging in these malpractices, and deter others in the industry from employing similar malpractices, and that, together with the provision of a cooling-off period, it will eradicate malpractices in the trades concerned in a long run. 

3 Reports Released during the Year

In October, the Council published a report titled “Risk or Opportunity – A Study on Building an Age-friendly Consumption Environment”, pointing out that while elderly consumers have substantial consumption power, there are limited choices of products suitable to them in the market, and their diminished physiological and cognitive abilities make them susceptible to unscrupulous trade practices.  The Council hopes that the findings of the report will arouse public concerns on elderly consumers, and turn the drawbacks of our ageing population into a potentially enormous opportunity for a vibrant silver hair market.

Young people are the most important human capital for the future development of Hong Kong.   In June last year, the Council published a report titled “Are Students Protected? An In-depth Look Into Overseas Education Advisory Services”, which revealed that many so-called  “consultants” that provided education advice services were indeed acting as the agents for overseas education institutions, so they might not truly be working on behalf of consumers to help them make the right choice.  The report also uncovered the lack of information transparency in the industry, and the absence of contractual obligations for the advisory services, which greatly hampers consumers’ efforts to seek redress.

Following the Memo of Understanding signed with the Korea Consumer Agency in 2017, the Council and the National Consumer Affairs Center of Japan jointly signed another memorandum of understanding to establish an information and complaints exchange mechanism that seeks to resolve consumer complaints that remain unsettled due to geographical, language or jurisdictional barriers.

The year under review also saw the publication of Issue 500 of the Council’s CHOICE magazine.  To commemorate this historic occasion, the Council specially designed a time capsule containing the wishes and expectations of various strata of society and it  will be unsealed upon the publication of Issue 600.

The Consumer Council Consumer Services Centre, located in Tsim Sha Tsui, was re-opened for operation in December 2018.  The centre consolidates the resources of the Complaints & Advice Division by expanding the area for handling consumer complaints, and accommodating more complaint staff to boost the efficiency and capacity in complaint handling service. 

The year 2019 is a milestone that marks the Council’s 45th anniversary.  The Council will continue to perform its duty with tenacity and move forward with the times to resolutely safeguard consumer rights and interests.  In the year ahead, the Council will continue to oversee the progress of the legislative process for the cooling-off period in a hope that the new Ordinance can be put into place and implemented to enhance consumer protection.